Nifty's share in India's market capitalisation at 20-year low, shows data

The Nifty 50 index largely comprises of top 50 companies in terms of free float market capitalisation

The contribution of companies in the premier Nifty 50 index to India’s total market capitalisation (mcap) fell to 45.5 per cent in 2024-25 (FY25), the lowest in two decades. In FY14, these 50 blue-chip companies had accounted for almost two-thirds of India’s mcap.

 

The steady decline in the dominance of Nifty 50 companies is on the back of an influx of new companies in the listed arena, and sustained outperformance of stocks in the broader market.

 

“Looking at the annual trend, the Nifty 50 share in NSE-listed companies, at 45.5 per cent in FY25, is the lowest in 20 years. This is on account of an increase in the number of companies listed on the exchange — from 422 in FY96 to 2,720 in FY25,” according to the latest edition of “NSE Market Pulse” report.

 

“In addition, the relative outperformance of mid(cap) and smallcap companies over the past decade has also contributed to this increase in a meaningful manner,” the report said. “Nifty Midcap 150 and Nifty Smallcap 250 have generated annualised returns of 16 per cent and 13.3 per cent, compared with 10.7 per cent for the Nifty 50 index in the past 10 years.”

 

The Nifty 50 index comprises the top 50 companies in terms of free-float mcap. A barometer for the performance of the Indian market launched on April 22, 1996, the NSE Nifty 50 index completed 29 years of its existence last month. Only 11 components have been part of the index since its inception.